Chinese telco boss: ‘The EU leads on 5G research’

ryan_ding_0.jpg

Ryan Ding, the chief executive for carrier networks at Chinese telecoms giant Huawei, believes that a major revolution is under way in ICT, with cloud-computing at its core. He tells EURACTIV how Europe is leading the way when it comes to research on super-fast next generation 5G networks but is too slow when it comes to actual network deployment.

Ryan Ding joined Huawei in 1996. He is the company’s chief executive for carrier networks, and previously worked as the president of product line, global solutions sales, and global marketing. He spoke to EURACTIV's Jeremy Fleming.

Do you think that the EU's Single Market proposal offers enough investment for broadband in Europe?

There is a strong trend to move towards a Single Market. As an equipment vendor, it is difficult for Huawei to comment specifically on whether this is a good or a bad policy. However, what is critical for us is that the EU adopts a policy which more actively stimulates investment in ICT. We thoroughly believe that investment in ICT is tantamount to investment in innovation.

What is 5G, and is Europe on track to get to this level?

Huawei is working together with the rest of the industry towards 5G research and definition. When 5G becomes a reality, it will make a huge difference to European users. It will mean that subscribers can benefit from an average speed for content of one gigabit per second, and a peak of 10 gigabits per second. The EU currently occupies a leading position on 5G research and standardization, and I have no doubt that this will continue into the future. But will Europe be the earliest to deploy 5G technology or have the biggest deployment for 5G? I would not be so confident on these questions.

Objectively speaking, it must be admitted that EU operators face a more difficult competitive environment and heavier burdens compared with carriers in other regions. The latest statistics for six EU countries – France, the UK, Germany, Italy, Spain and the Netherlands – reveal that €18 billion was paid on 4G licenses. It’s possible that these represent the world’s most expensive licenses.

Back in 2009 Huawei and TeliaSonera were the first to deliver 4G application base stations, in Norway. Now, four years later, there are still only 50,000 base stations for Long Term Evolution (LTE, or 4G technology) in Europe. Meanwhile, in September China Mobile finished a process of 4G tendering and its deployment of base stations will reach 200,000.

China has over one billion subscribers, and just one carrier about to deploy 200,000 base stations. Europe, on the other hand, has 500 million subscribers and only 50,000 base stations. It is quite clear that China is catching up with Europe on super-fast speeds.

Are Chinese companies operating in Europe treated as fairly as European companies operating in China?

I’m pleased to say that there has always been good cooperation between China and Europe in the telecommunications sector. Huawei is grateful to have had the opportunity to participate in the current research framework programme (FP7) and hopes that this will continue with the next programme (Horizon 2020). From that perspective Europe has always been open to Huawei.

In the other direction, China’s Ministry of Science and Technology invited EU vendors to participate in efforts to create standards for 5G. These moves give us confidence that China and Europe will continue to enjoy close cooperation on telecoms. Essentially, the partnership between Europe and China is far more important than the disputes between them.

People think of innovation in the telecoms sector as being mainly based around devices (smartphones and so on). But what are the latest innovations in network infrastructures, or ‘pipe’, as it’s known?

I oversee the pipe business at Huawei. From my perspective, innovation in this area is far more dynamic than innovation in the devices area. Innovation in devices revolves around resolution, performance, size definition, etc. but in terms of the basic architecture there is little that is actually revolutionary. Meanwhile, in the ‘pipe’ domain, Software Defined Networking (SDN) and Network Function Virtualization (NFV) are representing a technology evolution. And this significant new evolution is not smaller than the shift to all IP and single. SDN decouples user plane and control and therefore facilitates central control over distributed network elements. Meanwhile, NFV seeks to create more efficiency to deliver service to the end user by decoupling software from hardware and achieving gains from cloud computing.  

That is why Huawei has adopted the SoftCOM strategy. SoftCOM is a cloud-based future network architecture that leverages the power of SDN and enhances telecom operators’ competitiveness by transforming networks, operations and business. It involves decoupling hardware and software, transforming traditional IT infrastructures to a cloud-based infrastructure; and moving telecom-oriented systems to internet-oriented systems.

To be honest, the first time we proposed the idea of SoftCOM, there were many arguments and discussions within the company. In fact, it took two years before we decided to embrace SoftCOM, fully aware of the changes and the challenges that the strategy would bring. It must be understood that, as a traditional vendor, change is not always welcome. If you don’t make any changes, you can simply upgrade the installation base and guarantee profitability and growth. Any revolutionary change generates uncertainty for the future, and that is why we had a lot of debate internally.

However, we know that the failure to change brings its own risks. It is well recognized that in the mobile phone business there are Asian, European and US vendors who failed to seize the opportunities of the smartphone market, often leading them to lose market share, and in some cases to be bought out. At Huawei, we are clear that it is only by embracing change that we can maintain a competitive edge over the next ten years.

Our future investment strategy is SoftCOM, based on cloud, and that will be the basis of future investments in our products. In terms of NFV, Huawei has already become one of the most active and dynamic players. At the end of 2013 and at the beginning of 2014, we will launch a series of NFV-based commercial products. You can look forward to seeing some very exciting launches at next year’s Barcelona Mobile World Congress.

Your SoftCOM strategy is heavily centred around cloud computing, that means provision of data centres and data handling, is it fair to say Huawei has less of a reputation for that in Europe?

It is perhaps true that we remain less well known for this part of our business in Europe.

In 2010 our group President announced that Huawei would start investing in storage computing and operating systems for cloud computing, and last year we started European and Asia-Pacific market sales in this sector. 

It should be noted that, in China, Huawei has already become one of the biggest vendors for platform and storage, including for companies such as Alibaba, Baidu and Sina Weibo [Chinese equivalents of Google and Twitter].

The dominant players in the cloud market are US companies; does that mean you will be going into competition with these companies in Europe?

This is a global industry and standards and interconnectivity are a crucial part of innovation. The Global System for Mobiles (GSM) system is more successful than the Code Division Multiple Access (CDMA) system because it is global and not regional. Japan and South Korea prefer a global rather than a national or regional standard. Huawei does not want to challenge operators, we recognise the blurred boundary between information and communications technology and cloud technology. Without investing in cloud we will have no future, in the same way that – 15 years ago – if had we not invested in IP technology, we would not be in the position we are now in the telecommunications industry.

Huawei has very good cooperation with European companies in cloud computing – this is clearly demonstrated by our two-month old cooperation with SAP. In terms of NFV, Huawei has had many exchanges of ideas, including with competitors. To put it simply: ICT is in convergence and this requires global cooperation. Huawei is more than ready and willing to be a part of that.

Where is the platform for this cooperation?

In terms of data security and protection, the 5G standards body has a committee which has begun a systematic discussion around the issues. We believe that this is a good start because we can use this platform to talk about global security and data protection. In terms of cloud global cooperation there are two technology domains: NFV and SDN. Our aim is to develop global standards around those platforms, which will reduce costs and increase efficiency. The European Telecommunications Standards Institute is also playing a leading role, and we are pleased to have a chairman position in one Working Group there.

Industry

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.